NC Budget and Tax Center, Trump Administration

Would the U.S. Senate healthcare bill affect NC’s budget in a negative way? Definitely, here’s why…

The Senate GOP has released its proposed healthcare bill, and analysis shows that it would cut federal Medicaid spending even more over the next ten years than the House passed health plan. How much more? $467.4 billion. This cost shift to the states would cause greater state budget shortfalls: Instead of North Carolina losing at least $6 billion over the next 10 years in federal funding for Medicaid, it is estimated that the state would now lose and have to make up at least twice as much ($13 billion) over the same period for Medicaid.

To put that in perspective, North Carolina has only had to contribute $3.1 billion a year for Medicaid in state appropriations, on average, each of the past seven years.

How does this happen? Through a framework proposed by the GOP in Congress called Medicaid Per-Capita Caps. The Urban Institute explains that the American Health Care Act (AHCA) changes the way Medicaid is funded by capping federal Medicaid payments per enrollee, beginning in 2020. Under the House version of the AHCA, these caps would grow at the rate of the medical Consumer Price Index (m-CPI) for most Medicaid enrollees, adding 1 percent to the rate for the elderly and disabled.

The Senate bill, however, lowers the growth rate to the Consumer Price Index for All Urban Consumers (CPI-U) beginning in 2025. Over the next decade, it’s projected to grow at 2.4 percent, compared to the m-CPI rate of 3.7 percent used in the House version. This means a shortfall between federal Medicaid payments and projected costs that will grow over time, and states will have to make the difference up by raising taxes, cutting enrollment, reducing benefits, or reducing provider reimbursement.

President Trump has admitted that he used the word “mean” to describe the House GOP’s health plan. Given the fact that the Congressional Budget Office (CBO) is set to release its estimate for the Senate GOP health care plan very soon, and that it will show that millions of Americans will lose health coverage and billions in Medicaid costs will be shifted to the states, there is one question left to be answered:

Will North Carolina’s own U.S. senators, Richard Burr and Thom Tillis, do the right thing and reject the current proposal that would cut health coverage for millions of vulnerable Americans and shift billions in costs to North Carolina?

In Case You Missed It

Most of the debate regarding North Carolina’s state budget took place last week. And interestingly enough there was one topic that legislators did not address: the federal funding cuts that loom overhead. This is concerning given the massive cuts to federal funding proposed by the President and GOP in Congress. Based on those federal cuts, we know that North Carolina would have to come up with at least $13 billion in additional revenue over the next 10 years to maintain existing vital programs – one of those being Medicaid.

Before the Senate released its proposed health care bill last week we reported that the GOP’s health plan secrecy and Medicaid per-capita caps should raise alarms in NC. We stated If the Senate produces a new health plan bill and keeps Medicaid per-capita caps in its framework, North Carolina’s state budget and its people will suffer in the long-term.”

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.
NC Budget and Tax Center, Trump Administration

Medicaid is the single largest source of care for Americans with mental health, substance abuse disorders

The N.C. House and Senate have voted through their joint budget and it does not strengthen Medicaid nor call for its expansion to help the most vulnerable North Carolinians. At the same time, the closely guarded U.S. Senate health care bill written entirely behind closed doors is finally out and it too does not strengthen Medicaid, but rather proposes deep cuts to the program. By refusing to strengthen Medicaid for North Carolinians and Americans in need of medical assistance, the approach of our General Assembly and Congress reflects not only a lack of leadership but also lack of desire to combat our nation’s opioid addiction epidemic.

Evidence shows that Americans with mental health and substance abuse disorders are the single largest beneficiaries of Medicaid expansion. Based on NC’s growing opioid crisis – an average of 4 deaths a day – the intersection between Medicaid and opioids is very relevant. According to the National Council for Behavioral Health:

  • Medicaid is a vital source of care for people living with mental illness or addiction: In 2014, spending by Medicaid accounted for 25 percent of all mental health spending in the U.S. and 21 percent of all substance use disorder expenditures in the nation. Approximately 29 percent of persons who receive health insurance coverage through the Medicaid expansion either have a mental disorder (e.g. schizophrenia, bipolar disorder, clinical depression, anxiety) or a substance use disorder (e.g. alcoholism, opioid addiction) or both.
  • Medicaid expansion is an opioid treatment program: As drug overdoses have overtaken auto accidents as one of the leading causes of preventable death in the U.S., states have turned to medication-assisted treatment (e.g., Vivitrol, Suboxone, Buprenorphine, and the overdose reversal drug Naloxone) as an important tool in combatting the opioid epidemic. Many states with the highest opioid overdose death rates have used Medicaid to expand access to medication–assisted treatment; for example, in Kentucky, Maine, Pennsylvania, Ohio and West Virginia, Medicaid pays for between 35 and 50 percent of all medication-assisted treatment.

Given these facts, it is unfortunate that the General Assembly’s joint budget, instead of strengthening Medicaid and addressing issues in a comprehensive manner, has simply chosen to allocate $500,000 each of the next two years for a medication-assisted opioid use disorder treatment pilot program.

Given the General Assembly’s lack of interest in strengthening Medicaid to help North Carolinians in need, it is worth noting that President Trump’s Commission on Combating Drug Addiction and the Opioid Crisis held its first meeting last Friday and Medicaid was the elephant in the room.

President Trump appointed Governor Cooper as one of his five commission members to combat the opioid crisis, and Cooper used his allotted time to tie the fate of the American Health Care Act—and the fate of Medicaid—to the future of the opioid crisis, stating:

“At the addiction level we need treatment and prevention … and we’re kidding ourselves if we don’t think that what is happening over in Congress regarding issues of health care, matters to this issue. … If we make it harder and more expensive for people to get health care coverage, it’s going to make this crisis worse.”

Overall, it is critical for legislators to understand that Medicaid is the single largest source of care for Americans with mental health and substance abuse disorders. Given the opioid crisis in North Carolina, legislators must do more to strengthen Medicaid. Cutting Medicaid and reducing access to it will only worsen the opioid crisis that the people of our state are facing.

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.
Environment, Trump Administration

“This request is a disaster”: House committee grills EPA’s Scott Pruitt over Trump budget

EPA Administrator Scott Pruitt defended President Trump’s deep cuts to the agency’s budget at a House Appropriations Committee hearing (Screenshot: www.house.gov)

EPA Administrator Scott Pruitt faced a largely hostile House Appropriations Committee last week, which over two hours, grilled him over an anemic agency budget, proposed by President Trump.

“This budget request is a disaster,” said Rep. Nita Lowey (D-New York).

Trump’s budget reduces overall funding for the Environmental Protection Agency by a third — $2.4 billion — from last year’s levels. When accounting for inflation, this is the lowest EPA proposal in 40 years. The budget proposal eliminates 3,800 jobs and 47 programs, including radon protection, endocrine disruptor research, and Energy Star, which has saved customers $430 billion on their utility bills since 1992.

The president’s budget and policy decisions, Rep. Betty McCollum (D-Minnesota), said, “indicate Trump’s contempt for science.” The proposal slashes the budget for core projects such as Superfund (31 percent) and diesel emissions reduction grants (83 percent), climate change programs (91 percent) and scientific research (46 percent).

Rep. Betty McCollum: Through the EPA budget “the Trump administration has shown its contempt for science.” (Screenshot: www.house.gov)

These cuts could reduce the work done in North Carolina: The state has nearly 40 Superfund sites; more than $1.5 million in diesel grants have been awarded since 2013. The EPA office in Research Triangle Park employees more than 2,000 federal workers and contract employees.

I can't allow harm to be done to the American people that this budget would inflict Click To Tweet

“President Trump can propose this destructive budget and Mr. Pruitt can defend or promote it, “McCollum added. “But Congress and this committee determine funding. I won’t support a budget below 2017 levels. I cannot allow the harm to be done to the American people that this budget would inflict.”

Many Republicans were likewise concerned about how their respective districts would suffer from such a hollowing out of the agency. “In many instances, the budget proposes to significantly reduce or terminate programs that are vitally important to each member on this committee,” said Ken Calvert (R-California).

Pruitt, who as attorney general of Oklahoma, sued the EPA dozens of times and has close ties to the fossil fuel industry, defended the budget. He asserted that the EPA can “fulfill our mission with a trim budget with proper leadership and management.”

The EPA would reduce its workforce by 3,800 people. Pruitt said this would be achieved through “attrition, a hiring freeze and voluntary buyouts.” Twenty percent of EPA workers are eligible for retirement, although forcing out experienced employees could leave large gaps in the agency’s institutional memory and scientific expertise.

Pruitt insinuated that the cuts would come primarily from EPA headquarters, where about half the workforce is located. “Your want EPA offices throughout the country, working with the states,” he said.

The budget, he said, is sufficient to support the EPA’s core principles of “the rule of law, process and respect for the role of the states.” Pruitt was referring to the controversial Clean Power Plan and the Waters of the United States, which were not passed by Congress but a product of EPA rulemaking. His remarks about the states pointed to the agency’s plan to delegate more authority to them — albeit without sufficient federal funding — with the EPA intervening only if absolutely necessary.

“I’m baffled about how you’re going to have the tools to do that,” McCollum said. “I can wish for a lot of things. But how do I make those things happen with real dollars and real employees.”

The budget hearing occurred shortly after Trump announced that the US would withdraw from the Paris Climate Agreement. Rep. Lowey  noted that climate change programs within the EPA would be essentially eliminated under the proposal. “Your budget shows a willful ignorance to the threat that climate change poses,” Lowey said. “We have a moral responsibility to safeguard our planet. This budget would fall short on that obligation.”

 

NC Budget and Tax Center, Trump Administration

GOP’s health plan secrecy and Medicaid per-capita caps should raise alarms in NC

As Americans we should always expect a transparent and open government. An open government strengthens our democracy and promotes accountability, efficiency and effectiveness in government. Unfortunately, the U.S. Senate has continued to promote secrecy when it comes to its draft legislation to repeal the Affordable Care Act.

Yesterday, the New York Times covered this topic and was precise in pointing out that this secrecy has raised concerns among both Republicans and Democrats, stating:

“Senate Republican leaders are aiming to transform large sections of the American health care system without a single hearing on their bill and without a formal, open drafting session. That has created an air of distrust and concern — on and off Capitol Hill, with Democrats but also with Republicans.

I’ve said from Day 1, and I’ll say it again,” said Senator Bob Corker, Republican of Tennessee. “The process is better if you do it in public, and that people get buy-in along the way and understand what’s going on. Obviously, that’s not the route that is being taken.”

“In theory, the bill-writing process is open to any of the 52 Republican senators, but few seem to have a clear, coherent picture of what will be in it. Senator Ron Johnson, Republican of Wisconsin, offered a hint of the same frustration felt by Democrats seeking more information about the bill.

“I come from a manufacturing background,” Mr. Johnson said. “I’ve solved a lot of problems. It starts with information. Seems like around here, the last step is getting information, which doesn’t seem to be necessarily the most effective process.”

This secrecy, along with the fact that Senate Republicans plan to retain the Medicaid per-capita caps without major changes in their version of the House bill, is bad news for North Carolina. While per-capita caps would shift substantial Medicaid costs and risks to all states, North Carolina would face disproportionately larger cuts. [Note: Under a Medicaid per capita cap, the federal government would set a limit on how much to reimburse states per enrollee.]

The reason is simple, North Carolina is a state that meets most of the criteria laid out by the Center on Budget and Policy Priorities for states that would be most harmed by Medicaid per-capita caps. Below is a table with the criteria and a brief assessment of North Carolina against it. Read more

News, Trump Administration

N.Y. Times: DeVos family charter reflects nation’s school choice tensions

U.S. Education Secretary Betsy DeVos

Today’s New York Times takes up a fascinating study of a Michigan charter launched by the family of U.S. Education Secretary Betsy DeVos, and how the aviation school’s success may be more of a reflection of its wealthy founders.

The report comes with DeVos and President Donald Trump proposing a massive expansion of school choice funding, no surprise given the Michigan billionaire’s well-documented backing for the choice movement.

From The New York Times:

Julia Stevenson scurried through the hallway as her school day came to a close, hoping to take advantage of as much daylight as possible to complete one of the last assignments of her high school career.

“I’m flying home today,” Ms. Stevenson, 18, said with a broad smile, explaining that she was hoping for clear skies and a beautiful view of Lake Michigan on the 300-mile round trip from Gerald R. Ford International Airport to her hometown, Traverse City, Mich.

With her pilot’s license in sight, Ms. Stevenson was about to graduate from the West Michigan Aviation Academy, a public charter school here founded by Dick DeVos, the billionaire husband of Education Secretary Betsy DeVos.

Ms. DeVos has called it an inspiration for her dogged support for school choice, a shining example of what is possible when schools are able to meet students’ unique interests and needs. On Tuesday, she told thousands of charter school advocates that her husband’s school prepared students “to contribute in significant ways to our 21st-century economy.”

But with its deep-pocketed founder, corporate sponsors and remarkable capacity to raise money, the Aviation Academy may be more an example of what education can achieve with seemingly limitless funds than a model for other schools.

Like the neighborhood public schools of Grand Rapids, the academy, on the grounds of Gerald Ford Airport, receives $7,500 per student in state funding. This helps pay for its rigorous science, technology, engineering and mathematics, or STEM, curriculum and its faculty, including the four flight instructors on staff.

But it does not pay for the school’s two airplanes; many of its science, engineering and mathematics facilities; or its distinction as the only school in the country that offers flight instruction as part of the curriculum. Students can graduate and fly a plane before they can rent a car or legally have a beer.

How? The DeVoses alone have given more than $4 million to the school. Mr. DeVos donated an airplane from his private collection. Delta Air Lines donated another.

“The concept is good. I just wish a public school would’ve thought of starting that rather than have it be a charter,” said Mary Bouwense, president of the Grand Rapids teachers union. “But I guess we wouldn’t have been able to afford it. You have to have a boatload of money to start a school at the airport.”

The school, publicly funded and privately operated, is representative of the tensions in the school choice movement that have grown under the Trump administration.

Read more